Out of a job and out of luck at 54

A growing number of older workers are losing their jobs
as the economy weakens. And many are having a harder time landing new positions.

By Tami Luhby, CNNMoney.com senior writer

Last Updated: May 21, 2008: 9:02 AM EDT

NEW YORK (CNNMoney.com) -- Too young to retire, too old to get a new job.
That's how many older workers are feeling these days.

While it's not easy to land a job in this weak economy, older workers are in
a particularly tough spot. Corporate downsizings are hitting this group hard,
with many companies looking to shed the higher-paid positions these employees
often occupy. Even worse, older job seekers are discovering the search is even
rougher as many employers shy away from hiring those closer to retirement than
to the start of their careers.

The downsizings come at a bad time for older workers. Not only can't they
afford to retire, but many were counting on beefing up their 401(k) accounts in
the years before they exit the labor force. Compounding the problem is the
slumping stock market, which has left them with a deflated 401(k) cushion to
draw on while looking for a new post.

"There are tons of folks out there who cannot afford to live once they've
faced that involuntary layoff," said Renee Ward, founder of Seniors4Hire.org, an
online community for older workers and companies looking to hire them. "And it
takes them a little longer to find a suitable position."

Facing downsizing

To be sure, workers of all ages are suffering as companies trim their
payrolls. The national unemployment rate has jumped to 5%, up from 4.5% a year
ago.

But older workers are increasingly getting the corporate ax these days. Among
the unemployed age 55 to 64, nearly 42% had been fired or laid off, up from
32.2% a year ago, according to federal statistics for April. The figures are
even grimmer for those age 65 and older, with 23.5% getting laid off, up from
10.4% in 2007. These older workers saw the largest percentage point increases of
any age group during that time period.

Overall, the unemployment rate for those age 55 to 64 stayed relatively
stable at 2.7%, largely because fewer workers opted to leave their jobs or
re-enter the job search. The rate for those age 65-plus ticked up a bit to 3.5%
as more also chose to resign.

"When the market goes down, the more senior people are the first to go," said
Ellen Gottlich, president of Forty Plus of New York, which helps executives and
professionals find new jobs.

After they get the pink slip, older workers spend more time on the
unemployment line. Many lack the skills to search for jobs in today's online
world and to craft resumes and cover letters, experts say. And too often, they
are told they are overqualified.

Take Dale Booth. Since being laid off from a computer business systems
analyst post at National City Corp. in October, the 54-year-old resident of
Medina, Ohio, has sent out hundreds of resumes. He's gone to recruiting agencies
and even had his daughter forward his resume to the human resources manager at
the hospital where she works.

So far, he's had only one interview. About 90% of the time, he gets no
response and the other 10% he gets a form letter thanking him for applying.

His age, he thinks, is a factor because companies are concerned older workers
won't stick around and have higher medical costs. Also, though he has told
recruiters his salary requirement is $50,000 - $35,000 less than he made at
National City - Booth thinks employers view him as a costly hire.

"At my age and experience, there's an expectation that they'll have to pay me
more," said Booth, who is married with three grown daughters.

Hunting hard to find new job

It took those age 55 and older an average of 21.1 weeks to land a new job in
2007, about five weeks longer than their younger counterparts, according to
AARP.

"Clearly older workers will be more adversely affected because of the time it
takes to transition into another job," said Deborah Russell, AARP's director of
workforce issues.

During the recession of the early 1990s, older workers were hit hard by mass
layoffs. Concerned this is happening again, AARP is reaching out to companies
conducting the large-scale downsizings and giving them tip sheets to distribute
to older workers. The handouts aim to help workers navigate today's job market
by explaining search methods such as online employment boards and the importance
of networking.

Many older workers are taking jobs below their pay scale because it's all
they can find, said Ward of Seniors4Hire, which is experiencing a greater demand
for its services. She's seen an experienced telecom worker making $65,000 a year
accepting a customer service position in satellite companies making $11 an hour.

While Ward can find companies willing to hire older workers, many of her
listings are for part-time jobs, sales positions, retail clerks or customer
service reps. Even then, it can be hard for these job seekers to get hired.

"A lot of people are told they are overqualified," she said.

While some may think those older than age 55 can just retire, it's not a
viable option for many, said Steven Sass, co-author of "Working Longer," a new
book looking at delaying retirement. Many Americans simply can't afford to stop
working that young, he said.

"Most people don't have enough money," Sass said. "If they are going to have
a comfortable retirement, they are really going to have to stay in the labor
force. But it's tough to get a job when you're old...especially in a recession."

Chuck Dunn knows he can't afford to retire. The 56-year-old has had no choice
but to liquidate his retirement account after losing his product development job
with a high-end electronics manufacturer in October. Now he's considering
selling his house before he becomes a foreclosure statistic.

But Dunn also can't find a job, despite sending out several hundred resumes.
He's contacted those he knows in the industry, scoured online jobs sites and
worked with his local employment commission with no success.

"This is very frustrating for me since I am in my middle 50s and was trying
to save money for my retirement, not destroy my savings," said Dunn, a bachelor
who lives in Holly Springs, N.C.